Ray Youssef: Bringing Bitcoin Into Africa With Gift Cards Is Solving Real Problems


On today’s episode I talk with Ray Youssef, Co-Founder and CEO of Paxful, a peer-to-peer marketplace for money transfers serving about 4 million people in every country of the world. He says that in the next five years Africa with its tremendous growth in trading volume is going to become the leading crypto continent.

“Africa is leading all of our volume right now, and it’s growing tremendously. And every time a new country comes online, we start to see exponential growth. So you know this, these next five years are going to see Africa become the crypto continent in a way.” – Ray Youssef

“If you’re from America or Europe and you want to go to Africa and start a business, great. Find your African co-founder, you’re not going to go in there and do this without the Africans. In fact, the Africans are going to lead it. You know, we from the West are kind of guests here, you have to have the right mindset about Africa. This is essential to success.” – Ray Youssef

“I think women can definitely lead the future in Africa. The truth is, women lead most financial revolutions, right? Like especially products. They find something that works. They introduce it to the family first. They’re the ones that have to circulate the flow of money.” – Ray Youssef


  • His start-up failures and learnings
  • Why he was an MMA fighter and actor
  • His couchsurfing time in New York and what it taught him
  • Making money with gift cards
  • The founding idea for Paxful
  • Payment networks in Africa
  • Privacy
  • Africas growing trading volume
  • How Covid-19 impacted trading
  • Social justice and #BuiltWithBitcoin
  • Paxfuls vision for Africa
  • How to prevent scams and rippers
  • The Africans should lead your business
  • Women controlling the majority of the worlds money
  • The unbanked in the US


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Recording Date: May 15, 2020
Location: Online




Anita Posch:
Hello Ray. Thanks for taking the time to do this interview with me today. Ray, you are the co- founder and CEO of Paxful. We will get deeper into the values and goals of Paxful a little later. Can you please start with a short introduction to what Paxful is doing in which countries is it operating, and how many people are you serving?

Ray Youssef:
Paxful is a people powered marketplace for money transfers for anywhere. Anyone anytime. No borders. Paxful serves about almost 4 million people in every country in the world, but our biggest user bases are in emerging markets like Africa, India, and also the United States. We serve the entire world.

Anita Posch:
I thought your focus is on emerging countries and I didn't know that you also have a focus on the U S that's interesting. I mean, I know you have an office in there in New York. I've been there. I met with one of your marketing people last year.

Ray Youssef:
Oh nice.

Anita Posch:
I was looking forward to do this interview with you since February, because back then I heard an interview with you when I was sitting in the plane to Zimbabwe to prepare myself, to know a little bit more about Bitcoin usage in Africa. And I really liked the way you approach things and also your attitude to business and life seems to be quite different from what the, I would say, sleek Silicon Valley founder style is, is maybe your life story and your upbringing, a reason for that.

Ray Youssef:
Yeah, absolutely. I'm not one of those Silicon Valley boys, you know, first generation immigrants, African immigrants to the United States. My parents came to New York city from Egypt when I was two years old. I grew up working in their new stand Columbus circle. It's an hell's kitchen in Manhattan in the eighties, which was quite a different time, very different, New York.
So I grew up working on the street and understanding how to deal with people. And then I got a computer when I was 19, and I started developing right away to myself with a code, had, two startups, which were successful my first two. Then, I thought I and I needed a break was I was in the ringtone business, honestly, and it was, it was extremely difficult.
It was just when Napster went down, I had to deal with all the record labels. Anyway, long story short, I took a break after buying my mother a brownstone in New York. That was my dream, and then I took a break, traveled the world, did boxing, MMA, what do you call the ashes time? And my mother got a divorce.
So now is that the buyer, another place. So I came back and I started working hard again. I thought I was going to hit it big with the Midas touch. Instead, I had 11 failures in a row until I finally got to Paxful.

Anita Posch:
Oh, that's very interesting. I mean, I read about that story a little bit. I found a website within a story about you and I found also the part that you were a mixed martial art fighter. So did you do this really for money?

Ray Youssef:
No, it wasn't for money. It was just to understand myself a little bit, knowing my limitations or know the kind of person I really was. I was searching for myself. I was a know. I was a super nerd. I still am a super nerd, but. My first two startups I built by myself completely bootstrapped and they took a big toll on my life.
I was trying to understand who I was, what I was here to do, so I wanted to explore other parts of itself.

Anita Posch:
Okay. I understand. And that's why you also try to be an actor.

Ray Youssef:
Yeah. Yeah. We're trying to enjoy it. I enjoy writing scripts far more though.

Anita Posch:
it seems to me like a, a lifelong learning and then, getting to what you are and also to find, the thing you really like to do. And it seems that this, came perfectly together with Bitcoin in a way.

Ray Youssef:
Absolutely. I mean, looking at my job now as a CEO of Paxful, I could not do this job unless I had the lessons that every single one of those 11 failures taught me that year. I mean, it's, it's amazing. Literally, I could not do this job. Unless I had every single one of those experiences. So here I am guys, you know, six years ago in New York city, I was almost in my cofounder were surfing couches just to get by.
We had run to the end of our savings and we had to make some really hard decisions with the values that we learned stayed with us. Paxful has three values. Only three, but they're great ones they are: one, stay connected to the street, two, build for people, Paxful is not an abstract thing that machines use.
It's a real tool that people use and three, be heroic and I'll be happy to talk to you about how those three manifests everyday here at Paxful.

Anita Posch:
Yes, we will. We'll talk about that. That's a, I think you also mentioned another five values. I think we can talk about that later. And one of these is social, social justice, I think, and I'm sure. Interested in that. So one of your startups was called easybitz. what did you do there? What did you try to do.

Ray Youssef:
We were trying to get retail merchants like bars and hotdog vendors, restaurants to accept Bitcoin using a POS and it flopped. We tried it for a year and a half, but no one had any Bitcoin to use. So it wasn't the interest of merchants to train their staff on how to accept bitcoin it just didn't make any sense. We were trying to solve a problem that did not exist.
And that goes back to our second value. We build for people, meaning it starts people first. You have to go to the people, find out what problems they have and build something to help them with their problems. So we said, okay, we're going to pivot. What problems do we have? Me and my co founder, Artur looked around and said, Hey man, we don't even have an apartment. This is bad. We need to make some money. Right? So a friend of ours came up to us one day and said, Hey guys, you know you can make money selling bitcoin for gift cards. I was like, what? That doesn't make any sense. Like, yeah, you can take a PayPal, my cash gift card and you can buy one of those cards and charge it up.
are you charging for your PayPal account and spend it? And he said, you can get a $500 PayPal, my cash gift card with $250 worth of bitcoin. I didn't believe it, but I was desperate. I had nothing to lose. I barely had 300 bucks of bitcoin left. So I did it. It worked. All of a sudden I had 500 bucks for 250 bucks on, just kept repeating that.
And then we weren't homeless anymore. And we're like, Hey. This gift card thing is, is incredibly profitable. It's, we didn't know it at the time, but it's absolutely the best way to onboard the unbanked, and there's 40 million unbanked in the United States, which we'll get to later. So then we decided, Hey, let's build a system.
That allows people to get their Bitcoin quickly and sell their Bitcoin too, especially focused around things like gift cards and other digital assets. And that's how Paxful was born. Previous to Paxful, we were trading on LocalBitcoins, Bitcoin talk forum, Reddit, WhatsApp, et cetera. So we just took the best of what we're doing and put it together into a cohesive product, and it worked.

Anita Posch:
But where does this premium come from? I mean, how is it possible that you can make $250 with selling a gift card for Bitcoin.

Ray Youssef:
It's a free market, so anyone can put up any offer they want there. You know, our gift card premiums are very, very high. They go up to 50% anywhere from 10 to 50% depending on the gift card. So it's a free market, right? Anyone can put up any rate they want. It's, you know, some guys mostly from China, we call them vendors, right?
People that will put up an offer. And say, Hey, give me your a hundred dollar Amazon gift card. I'll give you back 80 bucks worth of bitcoin or 50 bucks. And the offer just sits there. They have their Bitcoin in their wallet. Someone starts to deal with them, Bitcoins go to escrow. There just has to be people that are willing to take that deal.
And what we started seeing was that there are many people that were willing to take that deal, even up to 50% loss, especially in places like Africa. And we wondered why, why are they willing to take such a big loss here. It's a great question. Matt Ahlborg wrote an article called Paxful is the most important Bitcoin company you've ever heard of.
And in that article, he gets into actual use cases. So it turns out a lot of Western Africans especially started using Paxful and Bitcoin for remittance. So previously the route looks like, Hey, get your friend in California or brother to send money to Western union. And it will come to you. You know, after two days, it will take you a day waiting on some super long line, you'll lose about 20% then they find out about Paxful.
So basically tell their relative in California, Hey, buy me an Amazon gift card, a thousand dollar Amazon gift card, and give me a copy of the code of the back of the card. They do it. Then the guy in Nigeria will take the code, start trading on Paxful, sold to a guy, most likely in China. It could be anywhere, anywhere, Singapore, and then he'll get Bitcoin, and then the African fellow will take the Bitcoin and then sell it to another fellow in Africa and Nigeria and say, Hey, here's the Bitcoin in escrow.
I want you to turn it to naria cash to my bank account. Here's my bank account. Boom. So with two trades, they converted a gift card into cash in their bank account halfway around the world. That's just an example of one of the remittance trade routes in corridors happening on Paxful now.

Anita Posch:
Yeah, I mean, I have seen you have about more than 300, payment, , services on Paxful. I mean, that's huge. How do you manage all those?

Ray Youssef:
Well, yes, it is far bigger than anyone else. However, as soon that might be 3000 or even. Yeah. I mean, I'll give you guys, you know, here's some perspective. In Africa. There are 2000 methods of payments alone. 2000 payment networks in Africa. Only 3% of them talk to each other. Just so you folks understand how, you know someone, I was mentioning this and then someone on Twitter said, Hey, but Africa doesn't need all this peer to peer funds.
They have M-Pesa and works and M-Pesa a great service in Kenya. Started by a telco, Safaricom and M-Pesa also works in seven other countries in Africa. And here's the deal. An M-Pesa user in Ghana cannot send money to an M-Pesa user in Kenya. They are also balkanized by the country. That's how backwards and broken the African financial system is.
So of course people need these services to be able to move in and out of all these walled gardens.

Anita Posch:
Yeah. And therefore they are prepared to pay a premium because at least it works.

Ray Youssef:
Exactly. And that's what people have to understand about the emerging world. In the beginning, I was like, man, 10% Western Union that's too much. Why should you take. And then you guys should go talk to these people. Like I've talked to them almost every day. You know, especially in the beginning, especially with like, you know, people from emerging markets, sorry, the beginning was United States.
It was the unbanked in United States. I talked to them and they don't really mind paying more. They really don't. They just want the thing to work and they don't want any trouble in their lives. The fast speed is important. They're very happy to do that because like you said, the alternative is they can't do what they need to do at all.

Anita Posch:
Which is also, I think a reason why, they don't care so much about privacy like we do because they are happily using Facebook because it's the only possibility for them to exchange and to communicate with each other online.

Ray Youssef:
Absolutely. It's a great point. You know, here in the West in the crypto space. There's a lot of people that I know. They're very visible and they don't want to be visible. They want to be invisible. Right. But there's 4 billion other humans on the planet. They're completely invisible and are desperate to be visible in any way.
And those are the people that we chose to serve. So, you know, I told this at the Baltic Honeybadger conference, and although, you know, privacy focused people, I said, yeah, I'm a privacy focused person too. I'm with you guys as a libertarian, but I'm not here to serve you guys. I don't really think you have that big of a problem compared to the other people that absolutely are paralyzed by their invisibility.
I'm here to help them.

Anita Posch:
You were living in New York by the time when you had the idea for Paxful or did you, I mean, how, how did you find out that you want to cater Africa and emerging countries because you could also concentrate on the U S only.

Ray Youssef:
Well, the truth is I didn't figure out anything either. I mean, there's some really, really smart people here at Paxful, but what makes us great is that we listen to our people. Ideas don't just come out of our heads. We have our ears glued to the streets, and the first way, that Paxful had, Paxful in the very beginning was doing very little volume, like gift cards, a few friends, and we thought I'd do it, and they were all going off.
They're very vibrant but small. Then one night I got a phone call, it's like three o'clock in the morning. Me and my cofounder were laid out on the couch of a WeWork in Soho and we were happy to be there with alternatives would be to street or surfer couch at some crazy girl's house? So I get a call at three o'clock in the morning and it's this lady and she's, she's yelling and she's screaming and she's just, she's in pain, she's scared.
She's like, Hey, I'm down to my last $13 and I need this bitty con. Bittiycon, she called it but not a pronounced Bitcoins. So I dig a little deeper and I was intrigued like, how did this person get my number? Who are they? Well, they found my number on the website. No one ever bothered to call me before. And it turns out this poor lady, had been surfing the internet for three hours or more, just trying to get Bitcoin and she couldn't.
Why was, lo and behold, she did not have a bank account. This is a white lady in Louisiana. No bank account, didn't want a bank account. I asked her, how did you get stuff before? How do you buy stuff online? She was trying to order an add on backpage.com right, and then she said, I go to the drugstore and buy a gift card, and I put in the number one vanilla visa gift card.
She said, I said, okay, how many other gift cards are there out, she mentioned all best buy target, Walmart, and said, okay, go and buy any one of those gift cards with your last $10. Then I, I basically, I went and secured someone that could take a $10 gift card. He would charge a very, very high margin because it was a lot of work.
It's processed $10 gift card. The showing you $2 and 50 cents in Bitcoin. Anyway, I walk you through every step of the way to a couple of hours and I saw through her eyes and then I redesigned the whole process to help people like that, non tech people that just needed something very simple. I was on the phone for almost six months straight after that first call, and that really helped define Paxful and our values.
We Rose to the occasion to help these people that no one else in the space cared about. No Brian Armstrong was not going to get on the phone with these people and help them walk them through getting in, using their first bitcoin without a bank account. Right. Everyone just ignored these people. We did not, cause we remember Bitcoin was created to help these people.
It really was, so how can we ignore them.

Anita Posch:
and how do you collaborate or work together with the people in Africa, for instance? I mean, the people who work for you, are they from the streets, from the countries where you have your platform.

Ray Youssef:
Yes. So we have something called the Paxful peer program, and it's enormously successful. It brings people from all over the world, and they represent Paxful as ambassadors, associates, peers. So that program has been proven to be tremendously successful. But just the point that, you know, we didn't really go.
Well, I mean, me and my co founder went physically to Africa four years ago and we saw how amazing the situation was meaning the people were brilliant, you know, the young people and entrepreneurs there, there was just like an army of them. They were all one more amazing than the next. And we're like, wow, you know, the greatest natural resource of Africa is truly in the heads of its young people.
These guys are ready to move forward. Right? They just need a path. They need jobs and a way to start their own business. And once we saw the problems in Africa, all the financial problems that these folks have to deal with, I can give you guys examples so you really understand what the average African has to deal with.
We saw the quality of the people and we saw the problems that they had and we said, okay, this is going to become the world's first crypto continent. Because you know, back then, no one believed in Africa and Bitcoin. They all said, Hey, there's no way. Those people are making $2 a day, are never going to buy Bitcoin from you.
They laughed, literally laughed in our face. We said, well, we think things are going to be different. So for the past four years, Paxful has done a lot in Africa. Not only have we gone there, I talked to the people every day. We building three schools. There are two schools are completed. We're building the third one now.
Our mission is full of a hundred schools across Africa in the emerging world. It's called BuiltWithBitcoin. We're building Wells. We can open up an incubation center there as well. We did a campus tour last year across eight universities. It was tremendously successful. I'm very happy to share the results of that and how it helped us.
I think everyone in the crypto scene, I think the next one we do you should join us. I think it would be amazing, but just to answer your question that you actually asked Anita the month, it would be good job of that. The African people came to us once they saw that. This was a service that was made for normal people would build for people and that we were responsive.
They could actually use it because they could get gift cards. Meaning when we got to Africa, we went to Nigeria. Those four years ago, we, the price of Bitcoin was 20 to 30% over market. And it's still the case in many African countries today. It's hard to get Bitcoin into those countries because it's hard to get money out of those countries to buy the Bitcoin, but those are the countries that need Bitcoin most of all.
So we set out to actually first bring Bitcoin into Africa. And Nigeria is the biggest economy in Africa, the biggest population, the biggest port, busiest port city in Nigeria. This is the place where the people here have immense hustle. The hustle was real. So we focused on that and we allowed them because they can access an electronic asset, gift cards turn into Bitcoin, connected them with China.
And now over $60 million a week goes through that one trade route alone. It's poured a tremendous amount of Bitcoin into Africa. And you can see the price of Bitcoin to Naria is almost market price now. So that is an achievement we are proud of, but we didn't do it. The African people did it for us, and we just, you know, help them along.

Anita Posch:
So basically you brought Bitcoin into Nigeria, into Africa, over your rails in a way.

Ray Youssef:
Yes, this was the only way to do it. If you talk to any company that does business in Nigeria, they'll say the hardest part is getting money out of the country. How do you do that? We solve that problem with gift cards and the tremendous hustle and business acumen of the Nigerian people along with the Chinese, bring that all together, throw a Bitcoin in there, stir it up, and boom, you have quite an awesome case study. In my opinion, I think it's the greatest case study of a real use case in Bitcoin thus far by far, actually.

Anita Posch:
Yeah. And it's interesting that we don't hear more about it. I mean, I went to Zimbabwe this February, because I thought, I would like to contribute in a way to bring the word, out from Africa to Europe and to the U S and to the Bitcoin community, that this is a real use case.
And that actually there would be the big, big markets, the big chances, not only for entrepreneurs, but also for the people.

Ray Youssef:
Absolutely, absolutely. And we're seeing that now. Africa is leading all of our volume right now, and it's growing tremendously. And every time a new country comes online, we start to see exponential growth. So you know this, these next five years are going to see Africa become the crypto continent in a way.
None of us can imagine. It's going to be a real underdog story. It's going to be beautiful.

Anita Posch:
Hmm. did the Corvid 19 crisis have an impact on the numbers of buyers and your trading volume?

Ray Youssef:
yes. In the beginning it sent a, the big our trading volume down by like 10% but then the next month it jumped up by 20% 30 total. If you come from before that, and the user views or signups jumped by 40% so there was a little dip. And then a tremendous explosion. And what we're seeing consistently is that the whole world is going to start going peer to peer.
Right now. Those people are beginning to ask questions. They don't trust the institutions they've been dealing with and the ways of doing things. They want other solutions that can't be taken so easily away from them where they don't have to ask for permission. And naturally that will lead people to type Bitcoin to search it and see, okay, what is this thing and how can you help me?
And eventually they'll find out about it. Peer to peer finance. They'll find Paxful first. They'll go there and they'll see, okay, once I have this Bitcoin, Oh wait a minute, I can turn it into money in an African bank anywhere, or a bank in the United States. I can turn it into Ali pay or make a Weechat prepaid payment or a PayPal deposit with it.
This is amazing, and it all starts from there. The African people really understand how to create something out of nothing.

Anita Posch:
I heard you talking about four or five basic values, that Paxful is operating on like a, one of this is social justice. what do you mean by that? And why is it so important for you?

Ray Youssef:
Yeah. They're actually a, we refer to them as use cases of Bitcoin. So there's seven cases. The first was grey markets. You know, every technology starts there. Then speculation. That's where we're currently at. And then there's five other use cases. There's payments, remittance, e-commerce, wealth preservation.
Right. And then the magical seventh use case we'd like to call social justice or sometimes social good. I like the word social justice a lot better because. Yeah. You know, there's, there's people in the world that should not be in the position that they are in. I come from an abundance mindset. I don't believe in scarcity.
I believe there's enough to go around for everyone that'd be technology that we have today. Everyone could be living an amazing life, driving a great car, traveling the world. Everyone could be eating, well, call me crazy, but I believe in that world, that world is only possible if there was no war. The war is only possible as bankers can print fake money.
That's why we call it Paxful. We named our company Paxful. Pax means peace in Latin. To remember our company is basically peaceful. We want to bring about world peace through an honest money system. That's all that's needed. Once that happens, you're going to start seeing abundance and prosperity breakout all over the world, and I'm not ashamed to say that.

Anita Posch:
Oh, I mean, that's not something to be ashamed about.

Ray Youssef:
So social justice for us, we thought really long and hard about it, and I was someone that never really believed in giving to charity. I was like, Oh, you give these guys money. Who knows where it goes to? They're just throwing parties, paying their costs, but how much it actually goes to the people.
Then I met this fellow on Instagram. He had an organization called ZamZamwater and he was building an orphanage in Afghanistan. I was so inspired by the video he made. I reached out. We became quick, fast friends, and. The guys are honestly the most forthright human I've ever met. He's so honest. He's literally an angel.
Everything you give these guys goes a hundred percent to the people, a hundred percent donation to their administrative costs. You can do that, but you have to specify separately. So anyway, fast forward to the future Youssef built our first two schools and he also built our first Wells. So in Rwanda. So we have some really big plans here, Anita, for Africa, we're on school number three right now, out of a hundreds or 3% of the way through, we're hoping to increase the speed of that.
If other companies join are built with Bitcoin initiative, which is a plan to build a hundred schools across Africa, the emerging world. And we're also going to build Wells as well, because the first waterwell we built in Rwanda, is now serving a half a million. citizens of Guga Sarah district, who are very happy to go there, spend a penny for a Gerkin, which makes us sustainable, meaning that we can actually hire people to work there.
And the whole thing, were ROI in two years. So these Wells saved the African people tremendous time. You know, they save six hours of the day of the oldest son for fetching water, meaning that elder son can go to school, meaning it's a tremendous bonus to the GDP of Africa in general. Imagine if we had one of those Wells in every district in our.
Imagine if we had a hundred schools across Africa. Imagine if we have incubators, crypto, FinTech incubators in all the major cities in Africa, and that is the plan of PAX Africana. And it goes even further than that, even further than bringing people financial services, water and education, which are the trifecta of civilization in general.
We also have big plans to give people cell phones. Paxful will be giving people free opensource cell phones with data. That's a huge thing in Africa, and allowing them to communicate with a family and friends, allowing them to have an ID. We want to give people an ID that their government has not even given them an ID, and believe me, there's hundreds of millions of those people in Africa.
We do that. We open them up to a credit rating. It's a massive boost in a country's economy. And we believe that's going to create a golden age in Africa and raise up the entire continent. As crazy as this sounds Anita this is how we think here at Paxful, we're completely bootstrapped. You know, we're just money from any VC, but we're already dreaming of causing massive geopolitical rapid prosperity and abundance. all about Africa. That's

Anita Posch:
Yeah. Well that, that's, that's a huge vision and a huge plan. because I mean, I just wanted to ask you about internet connection, you know, because, I saw how people struggle, to pay for their mobile data. So they cannot really install a Bitcoin wallet on their phone.
but on the other hand, in Zimbabwe, everybody's using eco cash. And it's the same like with M-Pesa. I mean, eco cash belongs to a company, so it's of course not, permission less. And, also the government, takes 2% of every digital transaction. So, people are really ripped off there. And, do you also have plans for solar powered things like, I mean, there's so much sun in Africa wouldn't it be a good place for Bitcoin mining too.

Ray Youssef:
I can't speak about Bitcoin mining, but I would love to get into that with our incubators and fund some Bitcoin marketing operations in Africa. We already have solar panels in the first school in Rwanda. That's power. You know, all the phones. We have a power station there as well. So. Definitely we're going to be, we're constantly maintaining these schools.
Like for example, this year we added a clinic and a sports field to the first two schools in Rwanda, and we're paying for the upkeep. We're paying the teacher's salary or paying for lunches and things like that. So it's not just building schools as if we're supporting them and it's a process of continual advancement, upgrading it. It's kind of like playing a game of SIM city, right? You're always trying to upgrade your town, but here it's real people whose lives were positively affected. So we're very proud of that and we want to accelerate the vision of BuiltWith Bitcoin even more. So this is a shout out to everyone out there.
If you want to help build Wells, you want to help build schools for real people, real children, something that is sustainable and not going away, only going to grow. Go to "built with bitcoin" or you can make a direct donation there to ZamZamwater. You know, Youseff called me up a couple days ago and he's like, someone just sent me $10,000 in Bitcoin.
Who was it? Was it you? I was like, no, it wasn't me. He didn't know where it came from. There's a lot of good people in this world and we can do a lot together.

Anita Posch:
Well, that's great. congratulations. that's a very great, idea and plan I had a question from one of my listeners, who's also already, selling and buying Amazon gift cards, for Bitcoin. And, he was asking me Amazon is forbidding the sale of Amazon gift cards, the trading with it, do those companies give you any trouble.

Ray Youssef:
Yeah. Pretty much every single one of them have sent us a cease and desist of some kind. And, you know, we, we have a warning. There aren't every page of a website saying we're not, we don't have anything to do with those companies. You know, we're not affiliated with them. We don't use their logos. But the real issue is, is a lot worse than that is, that's just the legal triviality.
We're allowed to do whatever people can do whatever they want. And as far as the legal, the, it's a free market. The issue is that these gift card companies have imposed a data embargo. Upon us and the entire world. Meaning they don't give you any way to check if an iTunes code is good or for an Amazon code is good, or if any of these other codes are good, what that does is it opens up a huge market for fraud.
And this is something called ripping, which is a very real problem, peer to peer, especially with gift cards, and we're trying to find a solution for it. So basically a ripper is someone that takes your gift card code. And doesn't give you the bitcoin. They claim their code is bad. But because you don't know if your code is good, sometimes there's no way for you to check.
There's no way for our moderators to check. Sometimes we have no choice but to award it to the market maker. So they're the ones taking all the risk processing these gift cards. So it's a very difficult balance to get right. But this data embargo by the gift card companies is a real crime, in my opinion.
It is truly a crime. It has hurt so many people. It has caused so much pain. It's forced us to try to make all these workarounds for it. We actually created a special operation. Within our company to handle it on a special task force to bus these rippers to protect a lot of our African card sellers. So yes Anita. that's a, that's a great question. And it gets onto a much, much bigger question, which is, again, one of the challenges we have to deal with and trying to onboard the emerging world.

Anita Posch:
If I would try to buy or sell Bitcoin on Paxful, I would not know how to be sure that I'm not ripped off.

Ray Youssef:
Yeah. So 99.5% of all trades on Paxful happen without any problems whatsoever. Great feedback. Read reviews super fast, but that half of 1% that's the where we're focused on. So this number is actually pretty amazing. We're not satisfied with it, of course, but considering that we operate in the highest fraud rate markets in the world.
And considering we deal so heavily in gift cards which are extremely risky LocalBitcoins took down their whole gift card section because they couldn't handle it. Half of 1% is really an amazing achievements. You know, this company nearly went, went down because of all the. You know, just the fraud and scams we have to fight off in the front line.
You know, two, two years ago especially, we were just like, I didn't sleep for about three months and we put it through that way. It was pretty intense. But this is the challenge that we have to take on to help the emerging world. And this is where a lot of people, they don't understand. They say, Hey Ray, I'm looking at your Twitter timeline.
There's a lot of people. Pissed off and accusing you of locking their funds and scamming them. I'm like, well, you know, they're like, well, how can you be a CEO of a company like this and say you're helping Africa if you're getting messages like this? And I tell them very simply, Hey, if you're not getting messages like that, then you're not helping Africa.
You're not even trying. It was weird going into a place that has been broken, that has been shattered. There's people there that are all like, they have no opportunities whatsoever. I can't blame some of them for going down there and trying to game the system a little bit, but at the same time, we have to have zero tolerance position.
Marketplaces are balanced. Let something get out of whack. You can destroy the whole marketplace. So it's not an easy answer Anita, there are tremendous challenges in the emerging world, especially Africa, India, et cetera, China as well. But we have to rock that we have to go through them to accomplish this mission.
There's no other way around it. It's not going to be the cleanest or. Prettiest smelling things on time. You have to, you know, being on the street, it means exposing yourself to a certain kind of energy. Or we have to go higher than that to help those people. Cause a lot of them just want help. They just want a path.
If you show them, Hey, you don't have to game or pull a scam or do anything, to make the money illegally. They're very happy to do it that way. And that's what we're seeing on Paxful. We've literally minted, I don't know how many millionaires across the world, but especially in Africa.

Anita Posch:
And what would you say. To young people, entrepreneurs who want to change something, who wants to start something? Should they go to Africa? Or maybe let's say it in the other way. If we, if we think our audience is from Africa, what would you say to them, to embrace their wish, to be, an entrepreneur and, doing something, for the community and for themselves.

Ray Youssef:
Yeah. So being an entrepreneur is something I can definitely talk about. Being an entrepreneur starts with one thing first, find a problem, find a problem that real humans have and try to solve it right. And try to solve it, not just for everybody. We're trying to solve for as specific, and that goes as just as concentrated a user community as possible.
One that you prefer will be, have direct access to. I can constantly be listening to them and iterating on your product. If you can get those two things down, you can start building things. And if we're going to go to Africa, whether you're white, black, or whatever, the first thing to do is always focus on the team building.
You know, if you're from America or Europe and you want to go to Africa and start a business, great. Find your African co-founder, you're not going to go in there and do this without the Africans. In fact, the Africans are going to lead it. You know, we from the West are kind of guests here, you have to have the right mindset about Africa. This is essential to success. So many people, so many businesses, when we talk about Africa, they're like, yeah, we're going to go, and this is our market penetration strategy. This is how we're going to take all this lands. It sounds like, you know, a serial rapist talking about his next victim right.
That's not conducive to enter a new market. And the African people have a great sixth sense about that. They're like, ah, more of this colonizing BS. Right? And they just ignore it. Even even M-Pesa flopped in South Africa. This is another African company that couldn't make their network stick in another African country.
That should give you some understanding about how unique the situation over there. You know, there's a lot of, you know, clustered communities, but our job and our value is to bring unity to all of that. And we can do it by following the entrepreneur template, which I just went into.

Anita Posch:
I would be interested in what you think about the chances for female entrepreneurs because I saw on Twitter, I think yesterday or the day before, one of your followers wrote, how's the situation in Nigeria for female entrepreneurs?

Ray Youssef:
Yeah, that was Maxine Ryan. Yeah. She's probably the best, probably, definitely the best lady business lady in all of crypto. She's amazing. She built Bitspark over five years, and you know, Maxine and George are co-founder. They always smell an opportunity, right? And they're, they're not afraid. They're like, yeah.
Nigeria is the place. I'm like, yeah, Nigeria is the place. So female entrepreneurs, I advise you to go all in on Africa. Maybe not Nigeria. First off, Lagos' is like Miami in the eighties on steroids. It's an amazing city. Never experienced anything like it, but Africa is very safe. Especially Kenya, South Africa, Nigeria.
Just a little bit more high testosterone intensity. But I invite all of the female entrepreneurs come to Johannesburg, come to Cape town, meet some amazing people there, come to our Bitcoin's center when we open it up. I think there's a huge future for women in Africa, and what I've noticed is that in the African kind of tribal money systems, you know, they, call them chama in Kenya or sou-sou in Nigeria or stokvel in South Africa. They're these money rotation clubs and they're usually staffed by women. You know, women actually, I think they control and circulate the majority of the world's money. They just don't own it, unfortunately. But in Africa, it's, you know, the women are always trying to find ways to use their money better to help each other.
And that's where all these social clubs are formed. So I think women can definitely lead the future in Africa. The truth is, women lead most financial revolutions, right? Like especially products. They find something that works. They introduce it to the family first. They're the ones that have to circulate the flow of money.
The man is working and making the money and giving it to the women, depending on the culture. But I think Africa, I think honestly, the future of Africa, women will play a huge part in the financial future of Africa, far more than women in the West play. And that's sad to say, but I believe it to be true.

Anita Posch:
Now you said US again, you wanted to talk a little bit about the unbanked in the U S because I think it's a huge amount of people who are unbanked actually.

Ray Youssef:
Yeah. There is 40 million unbanked people in the United States. And a lot of them don't want a bank account. They use these check cashing places that you'll see in some of the major cities in America. Cash your check and you know, I encourage everyone to go into one of those, check cashing places and then see how they work or possible observe a transaction.
They're very efficient. They give you all the services that a bank should give with none of the BS or things that are difficult to understand because most people just want to do four things with the money or their accounts. They want to be able to send money, receive money, put money into the system, and take money out of the system.
That's it. And that's what the check cashing places allow people to do. And that's what wallets like Paxful, a cashapp. Yeah. You know, M-Pesa allow people to do as well. And that's all people need. They don't need any complex financial instruments or this or that. People in America, the same as people in the Philippines, the same as people in Nigeria, South Africa, Malawi, whatever, we are people. humans just want this very simple things from their money system and whoever gives it to them is going to win. Because what we're seeing now, and this is a very interesting trend, is that the big banks like JP Morgan just gave Gemini Coinbase and accounts. Right? What's going on warming up to Bitcoin? No, they're really not warming up to Bitcoin.
What they're warming up to is the idea of getting traction in those emerging markets. Those are people that you've never been able to access, and they only see these people are starting to turn to crypto. You better believe they want their foot in the door because these guys do not want to be left behind and ignored.
So now they are opening the doors to Bitcoin because they understand that Bitcoin is a tool that is going to bring tremendous amounts of fresh blood into the financial system.

Anita Posch:
Hmm. Yeah, I think so too. yeah. Ray, that was great. Thank you very much for this interview and, I really love the optimism that you have and also, like the, the strength, in doing these entrepreneurial, efforts in which country do you want to start the Bitcoin center?

Ray Youssef:
we believe it will be in South Africa and Johannesburg. I think that's a good bet for the first one. And then from there we'll probably branch out to Nigeria. Kenya.

Anita Posch:
Great. What are the, are these also the countries with the most usage of Bitcoin?

Ray Youssef:
Yes, they are. Tremendous usage of Bitcoin on Paxful.

Anita Posch:
Okay. So I hope that when this Covid 19 crisis is over, I can travel again and then it would be great if I could visit you in one of these Bitcoin centers or, to see one of your schools that were built with Bitcoin. That would be really great.

Ray Youssef:
Oh, I would love that. Yes, you are invited. Absolutely. The second third school is opening up in Kenya in machaca and about a month you are invited. I would love to see you there,

Anita Posch:
Yeah, that would be great. Okay. Thanks for all, tell us please. Where can people find and follow you and your work?

Ray Youssef:
I'm @raypaxful on Twitter and I'm ray@paxful.com as far as email goes, you can hit me up there. I am also raypaxful on telegram as well.

Anita Posch:
Okay. Thank you very much. Yeah.

Ray Youssef: If you get customer support, I might be the one of the guys answering you

Anita Posch: Oh really? You still answer support tickets.

Ray Youssef:
Yeah, I do. And I do a lot of doing on social media as well, so I'm always trying to. Find the people that have slipped through the cracks. You know, a guy that might've gotten his account banned as he was just confused about something, but he wasn't actually trying to do anything bad.
Those are rare, but you know, our team is pretty good, but I'm always trying to just stay connected to the street, understand how we can improve our systems. Our challenge is tremendous. We are giving financial, giving everyone in the world access to every financial network in the world. And this is while things like KYC are still like broken industry-wide, you know, we're leading the way in KYC, where we are a very regulated exchange.
We are, have our federal license in the United States going for all of our state licenses where the first peer to peer company to do that. So it's a balancing act. I appreciate the good communities patience there, but I'm always around.

Anita Posch:
Great. Thank you very much for everything you do and all the best to you and Paxful

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